The Markets October 4, 2010

Loomis, Sayles Unveils Multi-Asset Class Portfolio

Loomis, Sayles has launched the Loomis Sayles Multi-Asset Real Return Fund (MARYX), featuring multi-asset class diversification designed to counter potential global inflationary environments, such as classic inflation, debtflation, stagflation or deflation.
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According to a news release, the fund was developed for investors looking for solutions beyond single asset class strategies, like TIPS, that may be limited in their ability to combat all forms of inflation. The fund will be co-managed by Kevin Kearns, fixed income portfolio manager and senior derivatives strategist; David Rolley, global fixed income portfolio manager, global investment strategist and head of the yield curve sector team; and Laura Sarlo, fixed income portfolio manager and senior sovereign analyst.

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The flexible and tactical nature of this strategy is aimed at preserving and growing the purchasing power of investor portfolios under a variety of economic conditions, while also seeking to limit volatility, the company said. The fund may be well suited for investors concerned with building long-term purchasing power as well as those uneasy about the overall diversification level of their investment portfolios.

Using a flexible mandate that allows tactical investments in a wide range of asset classes and security types, the fund’s performance goal is to beat the U.S. consumer price index (CPI) over a full market cycle.  Using a combination of top-down macroeconomic analysis and fundamental research, the portfolio management team seeks to identify the nature of global inflationary or deflationary trends and then applies sector and security specific allocations in an effort to optimize the fund’s risk/reward potential.

The fund may invest in a broad range of securities globally including fixed income instruments (TIPS, government, sovereign, and corporate), equities, ETFs, REITs, and commodity instruments, according to the announcement.

Deals & People October 4, 2010

Aon, Hewitt Complete Merger

As planned, Aon Corporation completed its merger of Hewitt Associates, Inc. with a subsidiary of Aon, creating Aon Hewitt late in the day Friday.
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The merger was first announced in July (see Hewitt Associates, Inc. to Merge with Aon Corporation).  

According to an Aon Corporation news release, Aon Hewitt has revenues of $4.3 billion and 29,000 employees globally. Combined revenues for fiscal year 2009 consist of 49% from consulting services, 40% from benefits administration and 11% from HR business process outsourcing, creating more resources for colleagues and more opportunities to serve clients with capabilities in greater than 120 countries around the world.  

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The company said complementary product and service portfolio across consulting, benefits administration and HR business process outsourcing will provide for significant cross-sell opportunities including the marketing of Hewitt’s benefits administration and HR business process outsourcing services to Aon’s clients, as well as the marketing of Aon’s risk services product portfolio to Hewitt’s clients.  

The transaction is expected to generate approximately $355 million in annual cost savings across Aon Hewitt in 2013, primarily from reduction in back-office areas, public company costs, management overlap, and leverage of technology platforms.  

Primarily through anticipated synergies and greater economies of scale, Aon Hewitt expects to deliver improved operational performance and a long-term operating margin of 20%.  

The merger is expected to deliver $1.5 billion of value creation for stockholders on a discounted cash flow basis, after subtracting the purchase price of the transaction

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